David Connolly, who pleaded guilty in February to securities fraud and money laundering connected to running a Ponzi scheme, was sentenced to nine years in prison today by a federal judge.istockphoto.com

WATCHUNG — The elderly victim approached the lectern in the center of the courtroom. Several feet away, the man who had duped him and other investors out of more than $18 million in an audacious Ponzi scheme built around seemingly safe apartment-building investments waited for his chance to speak.

Once the victim, the defendant David Connolly, and others had addressed the court, a federal judge would sentence Connolly for a crime authorities say reached into the lives of 200 victims in all.

"We are no longer a happy family, but rather, we are a disheartened, angry, vengeful family," Jon Burley, 67, said haltingly, his voice choking at times as he talked about the searing, tentacled impact of losing hundreds of thousands of dollars to Connolly. "I’m depressed. I cannot afford therapy."

Then, struggling to keep his composure, Burley leaned up against the lectern and said slowly, "My parents (could) no longer financially support my younger brother, who committed suicide last year as a direct result of the financial actions of Mr. Connolly."

And moments later, just before turning and walking from the courtroom’s well, he said to the judge, "Please, show him no mercy."

It was one of several stirring statements made by victim-investors to U.S. District Judge William J. Martini today, shortly before the judge gave Connolly a nine-year prison sentence.

Connolly, who pleaded guilty in February to securities fraud and money laundering, was also ordered by Martini to make restitution of $18.7 million and forfeit nearly $10 million to the government.

But many of the dozen or so investors who turned up in a Newark courtroom to see Connolly get sentenced, quickly pointed out after the hearing that they don’t expect their victimizer will ever be able to pay them back.

The hearing started late and ran long, and in the end, Judge Martini said he was giving Connolly a sentence that was firm and fair — and was also commensurate, he said, with punishments handed down to other federal defendants convicted over the years of running Ponzi schemes.

Still, the judge bypassed requests by prosecutors that Connolly, of Watchung, serve closer to 15 years. Martini also gave Connolly credit for taking responsibility for his crime — even though earlier in the hearing, the judge had questioned why in the "pre-sentencing" stage Connolly was not more remorseful and forthright with authorities.

"There’s no question as to the magnitude of losses we’re talking about," Martini said, as he described a Ponzi scheme perpetrated from about 2006 to 2009, during which Connolly allegedly misrepresented the amount of equity victims had in real estate investment properties, the condition of the properties, and the financial performance of them.

"You get the impression that he viewed himself … as master of the universe," Martini continued. "Some investors (like Connolly) think they’ve got the answers to everything" and they can survive when investments fail through illegally using other investors’ monies "in the hope that maybe someday they’ll get out of this mess.

"But … they rarely stop paying themselves," the judge noted. Earlier, federal prosecutor Charlton Rugg had said that Connolly, now 51, had kept paying himself in excess of $500,000 a year, even as the apartment buildings he bought fell into financial trouble and ruin.

According to prosecutors and investors, Connolly made many false and misleading statements over the years, as he convinced investors to sink money into buildings — mostly in New Jersey — in exchange for often 12 percent annual returns. For instance, they said, he told investors their money would be held in escrow until the closing of a purported real estate transaction.

Halfway through the hearing, Connolly, with thick silver hair and wearing a dark suit, took the lectern and apologized repeatedly to the duped investors sitting behind him. He said he never acted with malice. Yet, he said, he also knows that he did wrong.

"I was doing everything in my power to keep things afloat," he added. "I was in denial (about) breaking the law … I’ve come to the realization that I did break the law."

Afterwards, several of the investors said that while they had hoped for a slightly longer sentence for Connolly, they were satisfied he would serve a long nine years in prison and were ready, finally, to go forward and put a terrible episode behind them.

Still, 36-year-old investor Craig Silberman, who said he lost about $102,000 to Connolly, had a different reaction. “I think he got off light,” he said. Then, he thought a couple moments more, and added, “I’m moving on with my life.”